Sensex tanks after RBI puts rate cuts on hold | business | Hindustan Times
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Sensex tanks after RBI puts rate cuts on hold

business Updated: Mar 15, 2012 23:23 IST
HT Correspondent
HT Correspondent
Hindustan Times
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The benchmark Sensex of the Bombay Stock Exchange on Thursday snapped a four-day winning streak and fell 244 points, or 1.4%, at 17,676 after the Reserve Bank of India (RBI) refrained from cutting key lending rates and investors turned cautious ahead of the Union Budget on Friday. The index had slipped nearly 300 points intra-day.

Heavy profit-booking was seen as investors preferred to play it safe ahead of the Budget.

"The language of the RBI's announcement suggested that probably even in April they will hold on to the current repo rate regime," said Jagannadham Thunuguntla, strategist and research head, SMC Global Securities. "Moreover, investors tend to book profits before the Budget."

Major Sensex losers included DLF, which lost 4.8% to end at R196, BHEL, down 3.4% at R284, HDFC Bank, that lost 3.1% to end at R511 and ICICI Bank, which declined 2.5% to close at R930.

The BSE consumer durables index, which lost 3.7%, was the main loser among the sectoral indices. The BSE Realty Index lost 2.7% and the BSE Banking Index declined 2.6% as expectations of a repo rate cut - which could have led to cut in lending rates, thereby boosting consumer sentiment and consumption - receded till June.

Expecting the market volatility to continue, Thunuguntla cautioned retail investors from dabbling in the stock market at the current juncture.

"If people can't handle the volatility, they should stay away from the stock market before some stability returns," he said.

The market breadth remained negative as 1,848 scrips ended in the red, while 1,006 closed in the black.

Total turnover fell to R2,768 crore from Rs 3,177 crore on Wednesday.